Question: Using a least squares line you have predicted that the cost

Using a least-squares line, you have predicted that the cost of goods sold will rise to $8.33 million at the end of next quarter based on expected sales of $38.2 million. Your friend in the next office remarks, “Isn’t it also true that a cost of goods sold of $8.33 million implies an expected sales level of $38.2 million?” Is this conclusion correct? Why or why not? (Hint: Which is X and which is Y in each case, and which is being predicted from the other?)



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  • CreatedNovember 11, 2015
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